Park Chung Hee’s International Legacy[1]
William H. Overholt
Copyright©William H. Overholt, 2011
Former U.S. President Bill Clinton had an
enormously successful campaign slogan: “It’s the economy, stupid.” Whereas
Clinton just saved a campaign with this strategy, Park Jung Hee saved a
country.
Park Jung Hee took over the most threatened country
in the world in 1961. South Korea had been devastated by the Korean War just a
few years earlier. Its economy remained one of the world’s poorest. Its
political stability appeared to be among the world’s poorest. It faced a
formidable opponent with greater natural resources, superior industrial power,
seemingly superior political stability and the backing of Mao Zedong’s unified
and determined China.
Park’s predecessors and his enemy had radically
different priorities. Syngman Rhee’s overarching priority was military power.
This was not surprising for a leader who had had to conduct a war, but the
military priorities long outlasted the war and channeling the nation’s
resources so disproportionately into the military meant that economic
development programs came second, at best. Likewise, in North Korea Kim Il Sung
focused overwhelmingly on military priorities, an allocation of that nation’s
resources that has persisted to the present. Given the North’s extraordinary
effort to achieve military superiority, it would have been natural for General
Park to continue channeling the nation’s resources primarily into military
power. But Park, surprising for a general, chose to slash the proportion of GDP
going to the military and to focus on economic development. Park also
understood of course that successful economic development would build an
industrial base for military power.
The result of Park’s shift to economic priorities
and North Korea’s retention of extreme military priorities was that in 2009
South Korea’s economy, measured in purchasing power parity, was almost 35 times
the size of North Korea’s.2 Not only did this mean individual
prosperity, as compared with North Korean penury and starvation, but it also
entailed military superiority, political stability, and international prestige
as compared with North Korea’s gradually rusting military, political
demoralization, and global obloquy. Park had served in Manchuria and understood
how the economy there had provided Japan with a strong industrial base for its
military.
Park’s immediate predecessor, Chang Myon, had
different priorities. In contrast to the military priorities, authoritarianism
and human rights abuses of the Syngman Rhee era, Chang Myon’s presidency
emphasized democracy and human rights. Those aspects were widely applauded. But
Chang Myon also presided over a period of inflation, weak growth, ineffectual
administration, ideological division, violent demonstrations, uncertainty and
fear of renewed warfare with a seemingly superior North Korea. To an impoverished
and fearful population, the disorder killed all hopes for improvement of their
terrible conditions. South Korea seemed quite incapable of rising to the
standards of economic and political performance required to compete with a
northern enemy that most observers at the time regarded as inherently
superior—in military strength, economic stature and political stability. As a
result, Park Jung Hee’s coup in May of 1961 met little resistance.
The triumph of economic priorities and of course,
of keeping political order to make economic growth possible, is Park’s
principal lesson for the world. Rarely in history has a country gone from such
strategic inferiority to such strategic superiority in such a short
period. Perhaps never in history has a
people gone from such illiteracy, malnutrition and poverty to such prosperity
and educational sophistication in such a short time.
Japan’s success preceded and inspired South Korea’s
success under Park and assisted, with technology, management know-how, and
economic stimulus. But South Korea’s achievement was different. Its shift of
the balance from military to economic priorities (while of course maintaining a
military and strengthening its industrial base) was a domestic decision,
whereas Japan’s disarmament was forced upon it, and Japan’s economic miracle
was a recovery whereas South Korea’s was an original creation. Japan’s miracle
has decayed into demoralizing stagnation and potential debacle, whereas South
Korea’s more globalized and competitive economy and polity persist in inspiring
energy and growth.
The rapid ascent of South Korea, Taiwan and Japan,
in prosperity, political stability and international stature, heralded a
fundamental change in geopolitics. Previously countries gained stature and
prosperity by invading their neighbors, confiscating their riches, and taxing
their peasants. In the new era, it was possible, by growing the economy at
three to five times the rate of Europeans and Americans, to rise up the ranks
of nations largely through economic growth. Almost all of East and Southeast Asia
would eventually recognize this lesson and emulate it. Simultaneously, the
destructiveness of modern military technology increasingly meant that any
victory achieved through traditional military means would be a Pyrrhic victory,
diminishing both victor and vanquished. These two developments transform global
geopolitics in the most fundamental way, and the East Asian countries that have
realized this have benefited disproportionately compared to those, including
the U.S., that have weaker grasps of the implications of this new era.[2]
South Korea and Taiwan embodied this transformation
of geopolitical strategy. Hong Kong, Singapore, Malaysia, Thailand and
Indonesia emulated it and quickly benefited. China lagged behind by two
decades, but Deng Xiaoping, conscious of the superior performance of China’s
smaller neighbors, moved decisively to emulate the lessons of those neighbors,
with particular attention to South Korea. Later, when I spoke with Zhu Rongji,
I found that he had studied the economic lessons of South Korea with greater attention
than most Western scholars.
Beyond the basic lesson of priority for economic
growth, there were other vital lessons. There were more detailed priorities
behind South Korean and Asian success. In briefings that I began giving shortly
after Deng and Gorbachev came to power, I employed the following chart to
illustrate why Deng would succeed and Gorbachev, whose strategy received more
approbation in the West, would certainly fail:
|
East Asia priorities |
Gorbachev
priorities |
|
1. Agriculture |
International politics |
|
2. Light industry |
Domestic politics |
|
3. Heavy industry |
Heavy industry |
|
4. Domestic politics |
Light industry |
|
5. International politics |
Agriculture |
The South Korean/East Asian approach concentrates
on giving the vast majority of the population jobs, income and education. That
creates political stability and an economic foundation upon which a more
sophisticated economy can be built. With an educated, middle class society,
sophisticated modern politics becomes stable and relatively efficient. A strong
economy and a stable polity in turn provide the foundation for geopolitical
stature.
In addition to building on a foundation of
agricultural distribution through land reform (which of course long preceded
his presidency) and self-help programs like Saemaul Undong, together with light
industry, which distributed jobs to the broadest numbers of people, Park was a
fanatical egalitarian, particularly in education. He preferred to close the
best schools rather than to allow the emergence of a permanent narrow path to
elite status. In the West this degree of egalitarianism is associated with socialist
philosophies (like Mao Zedong’s) that are both anti-democratic and bad for
economic growth. But the long-run consequences of Park’s egalitarianism have
been good for both. His education-based egalitarianism created a broad,
educated workforce. It created a broad market, where for instance a high
proportion of the population became capable of buying a radio at around the
same time, thereby creating a domestic market of maximum possible size. It also
created a society where democracy could prosper, because an educated citizenry
could understand the issues and an egalitarian middle class society would vote
based on widely shared interests.
The success of this egalitarian approach contrasts
sharply with the difficulties of more rightwing societies like Thailand, where
elitist education, restricted higher education, and a radically skewed income
distribution have restricted the size of the educated work force, thereby
constraining the size of the domestic market and the technological advance of
the economy. Politically, a society like Thailand is far more divided and,
because of the low average education, far more vulnerable to demagoguery. As a
result, Thailand has stalled, as has the Philippines which suffers from a
different kind of elitism. China has followed the examples of South Korea,
Taiwan and Singapore in building a foundation of agricultural reform and
universal literacy; reformist China has done less than South Korea and Taiwan
to smooth the income distribution and ensure a sense of social justice, but it
is far closer to the Korean model than to the unconstrained elitism of Thailand
and the Philippines.
Park’s economic program of deliberately germinating
local firms, and helping those successful in one sector move to other sectors,
guiding their early growth from the president’s office, protecting infant
industries, and very gradual liberalization flies in the face of much
contemporary conventional economic wisdom, which tends to favor flinging
markets wide open. The Washington Consensus is very favorable for rich country
firms that want to seize control of emerging markets as quickly as possible,
but the somewhat more state-led and state-protected approaches of South Korea,
Singapore, Taiwan and China, but not Hong Kong, have characterized the most
successful early economic takeoffs.[3]
Park’s state-led development escaped the failures
of many other state-led models by fostering efficiency through competition. He
nurtured a dozen chaebol that competed in the same sectors. If they failed by
honestly trying to meet their government-set targets, the government supported
them, but if they failed through poor management they were left to die.
Frenetic domestic competition, the risk of complete failure, and gradual
opening of the market to international competitors refined South Korea’s competitiveness
and saved it from the pitfalls of the Philippine and Indonesia, where
monopolies reigned, and of the Soviet Union, where there was little domestic
competition, negligible foreign competition, and no risk of the firm dying.
China has emulated the South Korean model, with a tremendous emphasis on
domestic competition from the late 1990s onward and far greater openness to
foreign competition than South Korea. As with other aspects of Chinese success,
this emphasis on competition was based on careful studies of the experience of
predecessor economic takeoffs like South Korea’s.
Park’s emphasis on competition was refined by what
I would term a policy of feeding success. With both the chaebol and the Saemaul
Undong (rural development) programs, he not only refused to bail out failure,
but also enhanced the flow of resources to the most successful companies and
villages. He was profoundly concerned to give everyone the chance to succeed,
most notably by emphasizing universal education, but his programs emphasized
feeding success rather than subsidizing those who failed.
Park had ambitious goals to build a modern economy,
but was desperately short of resources. One key strategy for managing this
dilemma was to create special industrial and trade zones, where water,
electricity, infrastructure and helpful regulation were concentrated. These
zones enabled an industrial takeoff that created resources for bringing the
rest of the country up to modern levels. These enormously successful zones were
the predecessors of China’s much bigger and more differentiated special economic
zones, and of the more distinctively Chinese use of “one country, two systems,”
“one city, two systems,” “one sector, two systems,” and “one company, two
systems” approaches that enabled a swift but smooth transition from a
pre-modern (and in China’s case non-market socialist) system to a modern market
economy.
Park’s economy-led strategy required fending off
opposition from powerful interest groups. Opening the economy, however slowly,
and restoring diplomatic relations with Japan elicited overwhelming popular
antagonism, expressed in massive riots. Curtailing the military budget entailed
opposition from important segments of the military and its industrial
supporters. Building the Seoul-Pusan highway required him to overcome not only
the opposition of domestic groups but also the determined opposition of the World
Bank and the U.S. aid program. (The highway became the backbone of South
Korea’s development.) Park’s egalitarianism similarly attracted what in most
other circumstances would have been overwhelming opposition from the previously
dominant Christian elite. (Park’s military background led most Westerners to
think of him as right wing; on the contrary he was far closer to the socialist,
egalitarian left. Conversely, Kim Dae Jung, falsely labeled a communist at the
time, represented primarily the conservative old Christian landlord elite,
although his coalition also came to include the people of Cholla, who felt
marginalized under Park, students and many of the poor.) The political
opposition to Park coalesced around the formerly dominant Christian elite groups,
led by Kim Dae Jung, who were determined not to lose their previous
dominance. Park successfully resisted
all these forms of opposition by creating a coalition of military officers who
believed in his strategy, chaebol industrialists who profited from it, a
government administration that welcomed his institution building, and modern
intellectuals who accepted the strategy and profited from associating
themselves with his modernizing efforts. While Park’s authoritarianism was
marred by serious excesses, his sustained economic success required a tough,
determined imposition of priorities on a profoundly divided society notable for
powerful opposition to desperately needed reforms.
Park’s modernizing efforts were consolidated and
made permanent by building solid institutions, most notably competitive chaebol
and solid, meritocratic government institutions. (Like Deng, and unlike Mao, he
did not see meritocratic institutions as contradicting his egalitarianism but
rather as powerful tools for implementing his social goals.) Park built solidly
and permanently but constantly shook up the ministries by infusing them
laterally with cosmopolitan, highly educated talent and by acquiring advice
from think tanks. Park personally called young Korean academics (for instance
my good friend Kim Sejin, who was at the time an obscure assistant professor of
political science at the University of Kentucky) and encouraged them to return
to Korea to build their country. He
clustered them in think tanks, focused on everything from economics to
education to the arts, where they were paid far more than professors and where
their advice was highly valued by the government, and then, after training them
to analyze policy decisions, transferred them into high government
positions.
Here again South Korea, along with Taiwan, has
served as a model for China.[4] China has
recently begun elevating an expanded set of such practices almost to the level
of an ideology. Globalization, we are now told by the Chinese, has three
phases, the globalization of industry led by Britain, the globalization of
finance led by the United States, and the globalization of talent which China’s
leaders hope will be led by China. Here Park went far beyond his Japanese
predecessors, and the difference is a major part of the explanation why South
Korea continues a rapid ascent in global stature while Japan is suffering a
seemingly inexorable decline. China today has more students and officials
studying abroad than any other country. South Korea has proportionately more
students abroad than any other country. Japan’s numbers are low and declining.
Post-Park South Korea has continued to build on Park’s legacy in this regard,
and China, having started by emulating South Korea, is now going far beyond it
as part of the core strategy for future global leadership.[5]
Deng
Xiaoping and Jiang Zemin in China have emulated Park’s strategy, with results
that have changed the world. Their rejection of Mao’s autarkic,
anti-intellectual, institution-destroying, anti-business, peasant-based
strategy was an even sharper break with China’s recent ideological past than
was Park’s with his military-obsessed and subsequently democracy-inspired
predecessors. The degree to which China’s success is based on emulation of
Taiwan, and more importantly Park’s South Korea, cannot be overstated. In turn,
many other countries are drawing lessons from China’s development, thereby
extending the legacy of Park to much of the developing world.
Park’s institutional building and economic success
saved South Korea. Without it, the demoralization and decay that seemed to most
analysts at the time to make South Korea inherently weaker and more unstable
than the North would have continued until some fatal conclusion. The movement
in the U.S. to withdraw troops from South Korea because of misplaced analogies
between South Vietnam and South Korea would have succeeded. That premature
withdrawal, which would inevitably have been accompanied by attenuated economic
ties, weakening diplomatic support, enhanced domestic dissidence, and enhanced
North Korean aggression, could easily have doomed South Korea to another war
and to possible defeat.[6]
Like all great leaders, Park had important
weaknesses and failures along with his successes. He built solid, enduring
government ministries and think tanks, and a solid, enduring chaebol system,
but he did not institutionalize a political party. His efforts at globalization
were slower than optimal and South Korea continues to run risks of falling
behind more open economies and societies like China. (Here I of course refer to
openness regarding trade, investment, and talent, where China is far more open,
not to political freedoms like speech, press, and the general flow of
information, where South Korea is far more open.) His excessive focus in the
late 1970s on chaebol-built heavy industry caused inflation, an unbalanced
economy, and weakness among the small and medium enterprise sectors that are
vitally important for employment and innovation.
In the latter part of his career, Park failed to
understand the crises of success. Successful economic development created a
complex economy that could no longer be managed efficiently by an Economic
Secretary in Blue House. Likewise, an educated middle class society would no
longer accept basing the whole society on the simple priorities of maximizing
economic growth and safeguarding national security. Higher values of democracy
and human rights became politically decisive once fear of war and starvation had
been vanquished and once an educated society sharing common middle class
interests had created the foundation for stable democracy. The practices and
institutions that had been created during the 1960s and early 1970s in order to
ensure stability became sources of serious instability. Excessive reliance on
politically connected chaebol led eventually to mismanagement, and excessive
suppression of labor unions and wages led eventually to an excessive union/wage
reaction that worsened the crisis of 1998 two decades after Park’s presidency
ended. Had Kim Dae Jung been assassinated, or had later student demonstrations
been suppressed with excessive force, the country might have torn itself
apart.
As it happened, South Korea made a successful,
gradual transition to a higher level of both economic and political management.
The elites and institutions that Park created brought equilibrium to a country
that had moved beyond the practices that he had employed and was comfortable
with. Because of this, his legacy has been based on his successes rather than
his failures. That is perhaps the truest test of greatness. In building on his
successes, South Korea’s more open economy, more vigorous democracy, and more
egalitarian society have avoided both the atherosclerosis of Japan and the
crippling divisions of Thailand. As a result, it is rising rapidly in economic
stature, in geopolitical influence and in universal respect for the human
dignity its citizens enjoy. By 2015 Korean incomes, adjusted for purchasing
power, will be higher than Japanese incomes. Already South Korea is Obama’s
favorite ally. Already South Korea is
more wired than the U.S.
Hopefully
this makes it ready for the next great challenge, which is managing relations
with a foundering North. Park’s challenge was to cope with a militarily,
politically and economically superior North Korea. As a result of his
successes, South Korea today faces the opposite challenge of coping with a
North Korea that is inferior and decaying in every dimension. Ironically, this provides an equally serious
challenge.
up
its side of the defense burden in a war that would have had to be fought mainly
by an already exhausted U.S. military, U.S. abandonment would have been
virtually certain.
[1]
Paper prepared for presentation at the International Forum for President Park
Jung Hee’s Political Leadership, Dongyang University, Yeong-ju City, Republic
of Korea, May 13, 2011. . My understanding of Park’s priorities and of the
transition from the earlier governments is shaped most fundamentally by Sejin
Kim, The Politics of Military Revolution
in Korea (Charlotte, North Carolina: University of North Carolina Press,
1971) and Sungjoo Han, The Failure of
Democracy in South Korea (Berkeley: University of California Press, 1974).
The day before I departed for this conference I received a copy of a newly
published book, Byungkook Kim and Ezra F. Vogel, eds., The Park Chung Hee Era: The Transformation of South Korea
(Cambridge and London: Harvard University Press, 2011). This is clearly the
definitive work on the Park era. 2
CIA, The World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html,
estimates South Kore’s 2009 GDP at $1,383 billion as compared with North
Korea’s $40 billion.
[2]
I have been writing about this for decades, including most recently in William
H. Overholt, Asia, America and the
Transformation of Geopolitics (New York and London: Cambridge University
Press, 2008). That volume has selected citations of earlier papers.
[3]
And others, including the U.S. and other parts of the developed world. See
Ha-Joon Chang, Bad Samaritans: The Myth
of Free Trade and the Secret History of Capitalism (New York: Bloomsbury
Press, 2008)
[4] This observation was the basis for my 1993 book, The Rise of China: How Economic Reform is Creating a New Superpower (New York: W.W. Norton, 1993) and for a series of articles on that theme dating back to the early 1980s. For many years that thesis was ridiculed, as were Park’s efforts during the first decade of his rule, but as one who had not only combed the statistics but also wandered through the mountain villages of South Korea to check on the outcomes of Park’s strategy, I was totally confident that a similar strategy would work elsewhere.
[5]
These ideas have been elaborated in books in Chinese by Huiyao Wang and by
government decisions. For one summary, see Huiyao Wang, China’s National Talent
Plan: Key Measures and Objectives, Brookings Institution, November 23, 2011,
available on website http://www.brookings.edu/papers/2010/1123_china_talent_wang.aspx,
accessed May 2, 2011.
[6] It is easy to forget what momentum the movement for withdrawal had—led by people like Anthony Lake, head of Carter’s presidential transition team, a key Carter National Security Council staff member, and a future national Security Advisor.
I ran the Asia policy task force for Jimmy Carter’s 1976 campaign and fought futilely against the tsunami of support, including by Carter himself, for withdrawing all troops from South Korea. Convinced that the fate of 40 million people was at stake, I devoted myself after the campaign to writing a 400 page memorandum to document the difference between South Korea’s rapidly strengthening institutions and South Vietnam’s weakening ones. The false analogy between South Korea and South Vietnam did rely at the time on the fact that both were authoritarian and therefore, in the view of U.S. ideological preconceptions, both must be inherently unstable. But the more fundamental fear regarded the obligation, untenable in the wake of defeat in Vietnam, to rescue what was seen wrongly as an incompetent and fatally weakening Asian ally. (To get a feeling for the mood of the era, it is sufficient to read the New York Times’ 1976 coverage of South Korea, which saturated the front page and the editorial page with stories about South Korean demonstrations and presumptive instability, while devoting only a tiny number of finger-length articles buried in the business section to the economic growth and improving conditions of life that saved the country.) If South Korea had been an incompetent democracy like those of the Philippines or Chang Myon, hence a tempting target for large scale North Korean attack and utterly unable to keep
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